Question
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $120,000, which includes fixed
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $120,000, which includes fixed costs of $90,000 and variable costs of $30,000. The company can buy the part from an outside supplier for $3.3 per unit, and avoid 30% of the fixed costs. If Harvey Automobiles makes the part, how much will its operating income be? A. $141,000 greater than if the company bought the part B. $135,000 greater than if the company bought the part C. $135,000 less than if the company bought the part D.$141,000 less than if the company bought the part
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